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Comment by lmm | Hacker News Reader

Does facebook actually lose anything? It sounds like they walked away with the maximum amount of money possible; the bankers might be upset, and I can see that might make it harder for facebook to raise money in the future, but they're unlikely to need to for a while yet.

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Well such a mistake would it hurt their ability to communicate with the analysts and the markets. They'd have less credibility and would have a harder time explaining anything tricky. They may hear less about what investors do and don't think and what drives the stock's movements.

Over time those communication gaps can lead to more volatility in the stock and perhaps lower levels. That may not matter to Facebook until it needs capital. But it will matter to early investors and employees holding stock they'd like to liquidate. Some of those players may have such returns they don't care, but not all of them are so fortunate and in general it's a missed maximization.

How important all of that is depends on what FB wants to do and be.

More broadly, public markets are an important constituency, if those investors don't trust you that's going to influence your reputation in the media and with the government.

Every employee who is locked into their shares for 6 months is losing money every day.

Find me one employee who would feel ripped off that their 5000, 10000, or 100000 sell at even $20 instead of some hypothetical number could have been achieved by better hypothetical management. Oh those poor people, should have taken the offer to work at _____ instead?

It's pretty easy to be on the outside and say, "Oh, boo-hoo, they're still millionaires", but it's a different story when it's your own wealth. I assure you I could find people around the world who would say the same about your earnings.

Anyway, the point was that the stock diving isn't victimless. There are real people losing real wealth.

Edit: http://www.reddit.com/r/finance/comments/u0om7/im_an_employe...

Not if what we're talking about is facebook getting a higher valuation than they "should" have. If facebook is "really" worth 90 billion, then the employees are going to get x% of 90 billion 6 months from now; that would still be true if the IPO valuation had been 80 billion rather than 100. No?

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